Changes to California Insurance Don’t Help

Fresno, CAA California woman whose life has been described as “a living hell” blames the insurance underwriter, in association with her former employer, for leaving her high and dry with denied disability insurance for the past eight years. Injured on the job in 2003, she was only paid benefits for two years. In spite of substantial evidence as to the woman’s disability, the insurer stopped payments, resulting in job loss and homelessness.

Guadalupe Ortega even had her children taken away from her, according to The Fresno Bee (8/6/13).

Ortega’s denied ERISA disability story is heart-wrenching. The one-time employee of Lyons Magnus of Fresno was injured on the job about 10 years ago, suffering injuries to her shoulder, neck and back. Her employer acknowledged that Ortega’s injuries were work-related and occurred on the job. Doctors having examined Ortega concur that the woman is 70 percent disabled.

However, according to the report, Sedgwick Claims Management Services - the carrier tasked with undertaking disability insurance at Lyons Magnus - paid out disability checks to Ortega for two years, then abruptly stopped. The woman’s disability help, overnight, suddenly became a situation of long-term disability denied.

Changes to California Insurance Law in 2005 reduced penalties faced by insurance companies for not paying claims, including workers compensation claims, in a timely manner. Prior to the change, according to the report, insurance carriers could not deny care recommendations from a qualified physician unless there was medical evidence to counter such an evaluation.

Dr. Douglas Curran, the doctor who evaluated Ortega and agreed to the extent of her disability, admitted that “care was being over-used and for insurance companies, that was an issue as well,” Curran said at a press conference. “Utilization review was an attempt to correct that, but it shifted the balance of power way into the insurance carrier’s power.”

Utilization review, under California Insurance Law, now makes it easier for an insurance carrier to deny or defer a claim regardless of its legitimacy. According to the report, there is now less incentive to pay back claims regarding denied ERISA disability on the part of the carrier, and government oversight into the outcome of changes to California Insurance Law is lacking, according to those in attendance at a press conference hosted by the California Applicants Attorneys Association earlier this month.

“Sedgwick has turned my life into a living hell,” Ortega said at the press conference. “How can the state of California allow this insurance company to fail to pay legitimate claims?”

It has been said that Ortega’s case is not unique, given the change to California Insurance Law and the willingness of insurance carriers to stiff legitimate claimants. There is an expectation that an increase in denials will prompt even more people to seek out a California denied disability insurance lawyer for California insurance claim help.